10. Micro-Insurance: The Need for Social Protection

Social protection is definitely a need in the growing world. It has been acknowledged as a fact that both social protection and economic development are mutually reinforcing each other. Besides, it is playing an important role in promoting social justice and equity and reducing poverty. Following are some of points favouring social protection:

Poverty reduction is of fundamental concern to most international development agencies; therefore extending social protection is of critical importance if dominant rhetoric is to be reflected in reality.
Social protection will promote social justice and equity.
Social protection policy interventions can improve the well-being of the poor simply by preventing sharp downfalls in income or consumption and can help to minimise risk for all citizens.
Social protection can be growth enhancing. If the poor have mechanisms that protect them from poverty-inducing shocks, they will be more likely to undertake riskier initiatives in the production and labour market spheres, which could result in a higher return for the poor and the economy overall.
If social protection helps prevent or mitigate irreversible damages to the accumulation of human capital, it will be beneficial to overall growth and contribute to poverty reduction on a more permanent basis.
Social protection enables people to take risks to pursue livelihood.
Social protection compensates for declining effectiveness of traditional and informal systems for enhancing livelihood security.
Social protection interventions contribute to the solidarity, social cohesion, and social stability of a country. If well designed and implemented, measures to enhance social protection support sustainable development.
Social protection can compensate for declining effectiveness of traditional and informal systems to enhance livelihood security.